Harare yet to pay for Zimplats land minister ‘seized’

Harare yet to pay for Zimplats land minister ‘seized’

February 15 2013 at 08:00amComment on this storyPeta Thornycroft Harare

Zimbabwe Mining Minister Obert Mpofu made headlines this week when he said he had “taken” 27 000ha of land from South African-owned platinum producer Zimplats. But Zimplats sold this land to the government in 2006 –with one minor outstanding problem: the government has not paid.

Zimplats sold the land to the government in the hope that it would be exchanged for empowerment credits.

“The credits didn’t emerge so the land is now accounted for within the 51 percent indigenisation deal,” an insider in Harare said.

The empowerment deal agreed last month between the Zimbabwe government and Impala Platinum (Implats), the owner of Zimplats, set the value of the land at $153 million (R1.4 billion).

Zimplats agreed to the 51 percent indigenous deal with the Zimbabwe government as follows: new shareholders will have to find about $1bn to pay for the land and 31 percent of the shares within 10 years or the deal falls away. Zimplats agreed 10 percent of its shares would go to a community trust and 10 percent to workers.

The land is a slice between the company’s operations at Selous, about 70km from Harare, extending 40km to the Darwendale Dam.

The land has hardly been used in the years since Zimplats sold it. A few Chinese nationals living in caravans went onto a bit of the land and scratched around with a drill for a year or two. A couple of Russian arms dealers also poked around in the land for a while and then abandoned their efforts.

The land has never been prospected and Zimplats sold it with a mere guesstimate of the value of the platinum underground.

None of the companies that signed “indigenisation” deals with the government of Zimbabwe last month are keen to discuss the details. But insiders believe that completion dates for the government to buy 51 percent shareholdings in two other platinum producers, Mimosa and Unki, are far sooner than the decade agreed with Zimplats.

Mpofu also says platinum producers must build a refinery within two years rather than send the the material to be refined in South Africa.

“Sure a refinery can be built. It will cost about $1bn, and who is going to pay for that? And even if the government found the money to pay for it themselves, where would the government get the electricity to run it?” an insider asked. “Zimbabwe is chronically short of electricity.”

Implats chief executive Terence Goodlace said last month that Zimplats would increase production from 180 000 ounces to 270 000 ounces of platinum a year by 2015. – Independent Foreign Service